This guide explains how the VAT registration process has changed for overseas sellers.
A UK VAT registration is a crucial step for overseas businesses wishing to enter the UK market. Getting the application right is equally important. A crucial update is necessary to be aware of regarding the preparation and provision of the correct information.
HMRC now requires additional information from overseas sellers of goods to be provided directly by them – not via an agent. This information will be requested directly from the business via a VAT registration questionnaire.
It is important not to ignore this request. VAT registration applications will be rejected if HMRC does not receive the requested information. Due to the difficulty overseas businesses may have completing the request, we have provided some helpful information below to help avoid this disruption.
The supplementary information required by HMRC for overseas sellers is as follows:
- Indicate your business status, such as sole proprietorship or limited company
- Current or former UK VAT registration numbers
- Any previous applications for a UK VAT registration number, such as the name of the tax agent and the HMRC case reference number
- If you’re a marketplace seller, you’ll also need the URLs of your stores or seller webpages
- Provide details on the type of goods you supply or intend to supply, as well as the distribution centres you use or intend to use.
- Other VAT registrations you may have within the EU
- Names and addresses of the individuals and/or companies who arrange or are arranging for your goods to be shipped to other EU countries
- A copy of all contracts and agreements with the distribution centres you intend to use. In the absence of contracts or agreements, you may provide copies of any emails or other documents related to setting up contracts or agreements with distribution centres.
Who will receive this request for additional information?
All sizes and industries of non-UK businesses, including marketplace sellers (such as Amazon and eBay).
What happens if my application is declined?
In the event that your application has been declined by HMRC, please get in touch with UK-ACCOUNTANT as soon as possible. You will receive feedback from us after we contact HMRC to determine the reasons for the rejection.
There will be an opportunity for you to appeal the decision. However, you must be confident that your business has demonstrated to HMRC that it is ready to trade.
When should I submit my application?
Time is of the essence. Applicants who apply too soon may be deemed unready for trading by HMRC within 30 days of applying. You should apply when you are confident your business will be able to answer all of these additional questions.
How do I define myself as an overseas seller?
A seller who does not have a UK business establishment but sells to UK customers is classed as an overseas seller by HMRC. Any business with no UK establishment must register and account for UK VAT to HMRC if they
- make taxable supplies in the UK
- In the next 30 days, expect to make taxable supplies in the UK
When will I hear about the approval of my application?
The processing time for UK VAT registration applications is currently 40 working days. It may take longer than expected. From 22nd of May, HMRC will close their VAT Registration Helpline – a team responsible for answering queries and chasing up VAT applications. HMRC advisers will be redeployed to processing a backlog of VAT applications instead.
If you need help chasing up your VAT applications or need help with applying as non-resident business in the UK, get in touch with our VAT Team.
You may also be interested to read:
Changes to VAT Penalties from 1st of January 2023